Date: January 2018
Location: Gosforth, Newcastle, UK
Name: Travelodge – three star
No. of Keys: 53
Seller: A private syndicate (?)…Heywood & Partners acted for them – Compass Estate Co.
Buyer: CPT, a £150m venture between CBRE Global Investment Partners and Cordatus Real Estate (December 2015), has acquired the long leasehold for the site with the price reflecting a net initial yield of approximately 5.25%. The site is let to Travelodge on a 25-year lease with RPI linked rent reviews. Ereira Mendoza and NJB Hotels & Leisure Property acted for CPT. In September 2017 CPT acquired the 71 room Travelodge Tewkesbury for a similar number – £4.7m, producing a 5.5% yield of an unexpired lease of 27.6 years.
Price per Key: £88,679
THPT Comment: Wasn’t so long ago (2012) that Travelodge really wasn’t flavour of the month with CVA, demands for rent reductions and handing over the reigns to its creditors, Goldman Sachs and two NY hedge funds )Avenue Capital and GoldTree Asset Management) to write off £235m debt, cancel a £482m eurobond and inject £75m cash into the group. More hotels of this size to come for CPT?
Fast forward to August 2014 and a property package of 144 Travelodge hotels were sold to a consortium of investors, including Goldman Sachs for an estimated £500 million.
The hotels, including 11 in London and 23 on motorways, were put up for sale through CBRE by Nick Leslau’s Prestbury Investment Holdings, Tom Hunter’s West Coast Capital, the Reuben Brothers’ Aldersgate Investments and Lloyds Bank.
The portfolio also included 63 pubs leased to Spirit Pub Company and Orchid Group, now part of Mitchells & Butlers, although these have been sold separately for almost £200 million to Cerberus Capital Management, the US private equity firm that owns Admiral Taverns.
In 2017 Travelodge reported 10 hotel investment sales that produced yields for the new owners of between 3.35% (London ) to 6.6% (Newport, Gwent)